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Banks that issue VISA and MasterCards may soon be able to issue American Express and Discover cards too, if they so choose. Currently, banks that are members of VISA or MasterCard are prohibited from issuing other cards. The U.S. District Court for the Southern District of New York this week ruled against VISA and MasterCard in the Government’s antitrust lawsuit regarding the card associations’ exclusionary rules which prohibit members from issuing American Express or Discover cards. In a 157-page ruling, the judge said VISAs bylaw 210(e) and MasterCards Competitive Programs Policy weaken competition and harm consumers in a number of ways. The court ruled that debit cards were included in the prohibition of VISA and MasterCard’s exclusionary rules. (However the ruling stated that including debit cards, as a necessary part of the remedy, does not put it in the same product market with general purpose payment cards.) VISA and MasterCard may appeal the ruling. The Court also ruled that the governing structure of VISA and MasterCard is not anti-competitive and does not need to be dismantled.

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